Market to Force Hand of Central Banks

Remember that 1,180 to 1,220 support band on the S&P 500 (^SPX) that I have discussed in recent articles, here and here. Well, by mid-day on Friday, August 5th, the market was slicing through that like a knife through butter. At this rate, the market may be heading towards a date with the 950-1,020 area of support on the S&P 500 (^SPX) that was discussed in my recent article: “The Market’s Downside: S&P 950.” That is probably the last area of support before the market signals that it is discounting significant probability of a total collapse of the global economy. The problem with such a decline is that it could literally guarantee the outcome of a collapse. Stock market declines of this magnitude could throw economies around the world into recession. Thus, we are confronted with the specter of aggressive and coordinated central bank intervention around the world to supportComplete Story »

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Remember when bashing central banks and predicting financial collapse as a result of central bank manipulation and intervention was considered "fake news" within the "serious" financial community, disseminated by fringe blogs?
Good times.

by Eric King via Contra Corner blog, Today David Stockman, the man President Ronald Reagan called upon along with Dr. Paul Craig Roberts to help save the United States from disaster in 1981, warned King World News that we are now entering the “terminal phase” of the global financial system that will end in total collapse.

The revised GDP numbers were released last week, and they showed that the US economy grew by 2.1% in the third quarter. Not so fast!
A big chunk of that 2.1% growth, however, was from a buildup in business inventories, which businesses accumulated for one of two reasons: (1) a voluntary accumulation in anticipation of an avalanche of orders, or (2) an involuntary accumulation as a result of disappointing sales.

OTTAWA — Timing can be everything.
One day after the U.S. central bank chose to hold off raising its long-dormant key interest rate, data on Thursday showed growth in the economy slowed more than expected in the third quarter — but maybe not by enough to derail a December hike in borrowing costs.
Gross domestic product grew by an annualized pace of 1.5 per cent between July and September, according to the Commerce Department, after a 3.9-per-cent increase in the second quarter.

Because of the rampant fraud and money printing in the financial system, the real “bottom” or level of “price discovery” is far lower than anyone expects due to the fact that the run up to 2008 was so rife with accounting gimmicks and fraud. The Greek debt crisis, like all crises in the financial system today, can be traced to derivatives via the large investment banks. Indeed, we now know that Greece actually used derivatives (via Goldman Sachs) to hide the true state of its debt problems in order to join the Euro.

The final and ultimate round of the Crisis that begin in 2008 will occur when faith is lost in the Central Banks. The entire rally in stocks post-2009 has been due to Central Bank intervention of one kind or another. Whether it be by cutting interest rates, printing money, buying bonds, or promising to do more/ verbal intervention, the Fed and others have done everything they can to push stocks higher.

Japan has arguably fired the first shot in what many fear to be a new ‘currency war’, and a Federal Reserve official has made clear the U.S. has the biggest bazooka.
Meanwhile, the unfolding foreclosure debacle and robo-signer scandal have increased the odds of follow-on housing market collapse, even as consumers show signs of serious retrenchment.